Venezuela’s economy has been struggling for years. The country has been trying to break out of that situation utilizing blockchain with several attempts so far. In a recent interview, President Nicolas Maduro said that the government will be using cryptocurrencies as a method for free national and international payments.
Venezuela’s Crypto Solution
President Maduro appears to be looking for new ways to provide payment methods for the Venezuelan population. The central bank and the finance minister could soon receive new ways to make national and international payments. These instruments are supposedly coming from the crypto world, as Maduro stated:
“The finance minister and Venezuela’s central bank have new instruments which we will activate very soon so that everyone can do banking transactions, as well as national and international payments through the central bank’s accounts. Venezuela is working within the cryptocurrency world.”
The country has reportedly been running internal tests to determine if it can hold cryptocurrencies in its reserves. The idea, purportedly, is to use Bitcoin and Ethereum to be sent from the central bank to the oil company’s suppliers as a payment method.
The Situation in Venezuela
Those alternative payment solutions could supposedly help Venezuela circumvent the restrictions coming from the US. The latter has the country isolated from the global financial system. Venezuela is experiencing one of the worst economic crises with the inflation rate reaching an all-time high of 815,194 percent in May this year.
Officials in the country have been making attempts to find a solution through blockchain before as well. The country is reportedly stacking up with Bitcoin and Ethereum and it also launched its own cryptocurrency last year.
Petromoneda or simply Petro was launched in February 2018 and it was supposed to be backed by the country’s oil and mineral reserves. Until this day though, the project is yet to be utilized and deliver any actual results.
With such a turbulent hyperinflation, there’s a strong argument for adopting, turning to, and stacking up with Bitcoin. Unlike any other currency in the world, Bitcoin has a fixed, pre-programmed inflation rate. As of now, the rate is 3.72% per annum and after the Bitcoin halving coming up next year, it will go down to 1.80%.
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